Bulk wine comes into its own

Thursday, 13. April 2017 - 12:00

Container transport has become the method of choice for shipping wine around the globe, changing the underlying dynamics of the wine market. That was the message from Angelo Cotrone from global wine brokers Ciatti, who was speaking at the Meininger’s International Wine Conference in March.

More than 40% of all wine produced in the world is exported, he said, of which “forty per cent is shipped in bulk, a tendency that’s rising." In some countries, more than 60% to 70% is shipped in bulk. Much of this wine is sent first to Germany for bottling, before being re-exported to its destination market.

“Germany is a global hub,” said Cotrone. “Over 3 million hL are exported from Germany, but only a third are German wines.”

Germany’s automated bottling lines are so efficient, that it costs less for Chile to bottle in Germany and then send the wine back to South America, than for Chile to bottle locally. “US wines are bottled in Germany and re-exported to the US,” Cotrone added. “We can bottle wines in Germany for about €0.30 per bottle and the costs go down with volume. In the US, bottling costs around $1.00 per bottle, with Australia somewhere in the mid-range. Transport is about €0.10 per Litre.”

Despite being shipped in bulk, producers are able to maintain their image and pricing. “Some people might say that the countries are exchangeable, but we wouldn’t say that,” said Cotrone. For example, in 2016 there was an unusual level of rain in Chile, and growers lost large amounts of grapes. As a result, prices doubled. “The buyers said, ‘this is too expensive’ so they went to South Africa, but the marketers said ‘no, we want Chilean wines’. So exchangeability has its limits.” By March 2017, Cotrone said that Chile was all but sold out. “Demand has not declined at all.”

Australia has also increased its prices, he said, as has California, “so we are seeing these overseas regions are very confident and not willing to negotiate. They can push through their prices and the buyers are loyal because they want these wines. Marketing has done its job and international wines are simply well established now. The demand is there.”Felicity Carter